A senior Labour MP has admitted that the party would look to 'forge a common alliance' with the SNP to ensure Ed Miliband becomes Prime Minister.

David Lammy, who is standing for London Mayor, said the SNP was a party Labour could 'do business with' in the event of another hung Parliament.

The admission comes amid increasingly stark warnings from the Tories that the SNP will hold Labour to 'ransom' if it holds the balance of power in Parliament next month.

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David Lammy, appearing on ITV's The Agenda last night, said the SNP was a party Labour could 'do business with' in the event of another hung Parliament

Polls suggest Nicola Sturgeon's party are on course to win up to 50 seats on May 7 – wiping out any hopes of a Labour majority.

But the Scottish First Minister has vowed to work with Mr Miliband to 'lock out' David Cameron from Number 10 in exchange for higher government spending, more taxes and increased borrowing.

Former prime minister John Major will today warn that Britain faces a 'daily dose of blackmail' from the SNP if they have the power to bring down a Labour government.

With 16 days to polling on May 7, Sir John will say that a Labour-SNP administration would lead to 'weak and unstable' government and wreck Britain's economic recovery.

Mr Miliband has ruled out joining a formal coalition with the SNP but has refused to be drawn on whether he could work with them on a vote-by-vote basis.

However, speaking on ITV's The Agenda last night, Mr Lammy went further – insisting that a deal with the SNP could be struck.

Mr Miliband meanwhile has accused the Prime Minister of 'threatening the integrity of the United Kingdom' by talking up the prospects of Scottish nationalists in the May 7 General Election

Speaking on Newsnight last night Mr Miliband insisted he would not form a Coalition with the SNP after the election

Ed Miliband rules out coalition with SNP after General Election

He said: 'We are fighting for a victory. I think we can win this election. But clearly, after the general election, you would forge common alliance with parties that you can actually do business with, and the SNP must be part of that story.'

It comes after Labour's shadow House of Commons leader Angela Eagle said in the event of a hung parliament Labour 'would speak to any party that has got representation in the House of Commons in order to try to build a majority for a Queen's Speech that the country desperately needs'.

Defence Secretary Michael Fallon said the admission exposed the threat posed by an SNP-Labour alliance.

He told MailOnline: 'One of Ed Miliband's most senior MPs is openly talking about forming a 'common alliance' with the SNP.

Nicola Sturgeon has called on Ed Miliband to forge an 'anti Tory' alliance

'The British public will pay through their noses for the higher taxes, the higher debt and the higher benefit payments an SNP-Miliband government will rack up.'

'There's only one guaranteed way to stop this – vote Conservative on May 7.'

Speaking on the BBC's Today programme this morning, the former foreign secretary William Hague said the Tories needed to 'sound the alarm' over the threat posed by the SNP.

He said: 'We have the danger here that people who want to break up the United Kingdom will be running the United Kingdom in a few weeks' time if there is a Labour government with a large number of Scottish Nationalist MPs.

'And it's not the Conservatives who have talked that up; it's the story, whether of opinion polls or of what everybody's talking about on the ground.'

He added: 'Unless we have a Conservative majority we will be faced with a Labour government in a minority dependent on Scottish Nationalists, that they will make impossible demands, they will demand higher taxes, higher welfare spending, weaker defences every single day for five years and that will be disastrous for families across the UK and for the whole future of the United Kingdom.'

Mr Miliband meanwhile has accused the Prime Minister of 'threatening the integrity of the United Kingdom' by talking up the prospects of Scottish nationalists in the May 7 General Election.

Speaking this morning Mr Miliband insisted there would be no coalition with the SNP and denied Nicola Sturgeon's party would hold the whip hand on policy, telling BBC1's Breakfast: 'A Labour government led by me, what happens in that Labour government will be decided by me, not by the SNP.'

Labour had 'fundamental differences' with the SNP, such as the nationalist party's desire for a second independence referendum within five years, he said, adding: 'I'm not having that.'

Mr Miliband said Mr Cameron had been 'talking up' the SNP in the hope that it would take votes and seats from Labour north of the border and allow him to 'crawl back' into 10 Downing Street.

'I think David Cameron is playing fast and loose with the United Kingdom,' said the Labour leader. 'This is somebody who has given up hope of winning a majority. He is trying to boost the SNP.

'I think David Cameron is now threatening the integrity of the UK with the games he is playing. And I think Conservatives are now ashamed of what he is doing.'